Climate risk

Climate risk is the potential for problems for societies or ecosystems from the impacts of climate change. The assessment of climate risk is based on formal analysis of the consequences, likelihoods and responses to these impacts. Societal constraints can also shape adaptation options. There are different values and preferences around risk, resulting in differences of risk perception.^: 149

Common approaches to risk assessment and risk management strategies are based on analysing hazards. This can also be applied to climate risk although there are distinct differences: The climate system is no longer staying within a stationary range of extremes. Hence, climate change impacts are anticipated to increase for the coming decades. There are also substantial differences in regional climate projections. These two aspects make it complicated to understand current and future climate risk around the world. Scientists use various climate change scenarios when they carry out climate risk analysis.

The interaction of three risk factors define the degree of climate risk. They are hazards, vulnerability and exposure. ^: 2417 There are various approaches to climate risk management. One example is climate risk insurance. This is a type of insurance designed to mitigate the financial and other risk associated with climate change, especially phenomena like extreme weather.